AAAE Responds to Proposed Rule to Update PFC Program Regulations

 

On November 27, AAAE responded to the Federal Aviation Administration's (FAA) proposed rule that would make a series of changes to the regulations governing the passenger facility charge (PFC) program. Most of the proposed changes would codify into 14 C.F.R. Part 158 policies that FAA has already implemented through existing guidance, including the 'PFC Updates' the agency has published previously as interim guidance.
 
However, FAA's most significant proposed change would be to implement the PFC streamlining provisions from the FAA Reauthorization Act of 2018, which expanded a streamlined PFC authorization process-that previously only applied to non-hubs-to include small, medium, and large hubs. Despite clear direction from Congress, FAA's proposed rule would only apply the expedited process to a narrow range of projects. In our comments, AAAE strongly opposed the proposed implementation, arguing that Congress never permitted FAA to exempt any projects from the streamlined procedures, FAA has exceeded its authority, and the proposed approach would have significant, negative impacts on airport capital improvement programs and the traveling public.
 
You can read AAAE's comments here. In addition to our letter to FAA, we are urging Congress to ensure that FAA properly implements the PFC streamlining provisions as originally intended in the 2018 FAA reauthorization bill.
 
Background. During consideration of the 2018 FAA reauthorization bill, AAAE, ACI-NA and airports from around the country successfully convinced Congress to adopt language calling on FAA to streamline the PFC application process for all hub sizes. The final bill, which Congress passed in October 2018, expanded the streamlined process already in place for non-hubs to small-, medium-, and large-hub airports. Instead of requiring airports to submit an application and wait 120 days for a decision, Congress required FAA to allow airports of all sizes to use an alternative process that only requires filing a notice of intent to impose a PFC and proceed with the use of PFC revenue on a project unless FAA objects within 30 days.
 
Summary of FAA's Proposed Implementation of Streamlined PFC Procedures. In January 2020, FAA issued interim, internal guidance-known as PFC Update 73-20-that implemented the streamlined procedures for reviewing applications received from small-, medium-, or large-hub airports to impose and/or use PFCs. FAA's guidance outlined the process for these airports to submit a PFC application through the expedited process. Unfortunately, the agency also indicated that projects involving the following are 'ineligible' for the streamlined procedures: (1) significant policy precedent; (2) significant legal issues; (3) significant controversy; (4) multimodal projects; (5) significant airport noise, access, or revenue diversion issues; (6) debt service on otherwise ineligible projects; (7) blending of two or more PFC decisions to obtain a uniform collection level; and (8) terminal building projects in excess of $25 million, except stand-alone passenger boarding bridges.
 
These 'exemptions' were developed solely by FAA, not Congress. We have previously raised concerns with FAA that the agency has failed to properly implement the PFC streamlining provisions through the 2020 interim guidance. In September, FAA released a proposed rule that would codify the interim guidance and the exemptions from the streamlined 'notice of intent' process. In our response to the proposed rule, AAAE voiced strong opposition, arguing that Congress never permitted FAA to exempt some projects from the streamlined procedures, FAA has exceeded its authority, and the proposed approach would have significant, negative impacts on airport capital improvement programs and the traveling public.
 
PFC Streamlining in Next FAA Reauthorization. As part of AAAE and ACI-NA's joint priorities for the FAA reauthorization bill, we have been urging Congress to fully implement the PFC streamlining provision that was included in the FAA Reauthorization Act of 2018 to provide to airports of all sizes a streamlined process for imposing and using PFC revenue. The House and Senate versions of the current FAA reauthorization bill contain different proposals to address our request. The Senate bill would help by prohibiting DOT from objecting to streamlining procedures for terminal projects and projects for which airports had already received federal funds. But it would codify some of the same exemptions that we oppose. The House-passed bill, on the other hand, would allow all airports to file a notice of intent to impose and use PFC revenue instead of filing an application.
 
What's Next? FAA will begin to review comments that the agency received in response to the proposed rule. FAA has not provided a timeline on when the agency expects to publish a final rule, although we expect that would occur by the end of 2024.